Baby Care Products Industry In India

What comprises baby care products industry?

Baby care products industry comprises of segments which address the needs of baby-care. Any product that promises to meet the demand for taking care of an infant, generally between o-4 years of age, falls under this industry. Typical segments of this industry are skin-care, hair care, baby food, toiletries [diapers and its accessories and wipes], apparels & footwear, baby travel gear and medical kits for everyday use.

Current Scenario

While the developed nations have reached near stagnation in the growth of baby products industry, there is a huge potential in the coming decades in developing nations including the Indian market for this industry. I am writing this article from India’s perspective. Due to the gradual cultural shift and the changes in lifestyles, the demand for baby care products has increased in the past ten years. Currently this industry is dominated by the skin-care and apparel & footwear products which take away the largest market share.

Baby food segment lags behind the most among other segments of this industry, followed closely by toiletries segment which comprises mainly of diapers and its accessories and wipes. The main reason for such a lag is the cultural barrier, which discourages pre-packaged foods for infants and also emphasizes on the importance of mother’s milk and freshly prepared food for the babies. Other reasons that are responsible for the lag are that the packaged foods (including formula for substituting mother’s milk) are mostly imported and are very expensive at the retail price. India has very few domestic players which cater to the baby food segment, which prohibits many potential buyers from buying ready-to-use baby food. Baby food products segment still remains strictly for rich Indian diaspora.

Drivers and Constraints

India’s large young and working-age population is the biggest underlying factor which will drive the prospects of growth of this industry. Apart from this India still has a rapid population growth which is supported by data. According to CIA World Fact Book the estimated birth rate in India by 2011 will be 20.97/1000 annually. It is expected that between 2010 to 2030 India will add approximately 241 million people in the working-age group. There are other drivers which are intertwined to boost the returns from investing in this industry. These drivers are increasing income levels in the middle-class, increase in working women population, high birth rates, increase in awareness about child care and increase in willingness by parents to spend on baby care products for better overall child development.

Couple these data and behavioral facts together and you can get a fair idea that there is immense potential to market baby care products in India in the coming decades.

On the other hand, some of the constraints that could dampen the growth prospects are availability of cheaper substitutes and cultural barrier especially for baby food segment and toiletries segment which discourage use of disposable diapers as they cause environment hazards when disposed. But the changing lifestyles in India are fast changing the traditional mind sets and are overpowering the cultural barriers. The convenience factor and quality standards are taking up the priority in deciding for the baby care products.

Trends or opportunities:

With the growing education levels and increasing information flow during the fast paced Internet age, this industry poses many new opportunities. There are growing trends about introducing organic products for babies. This trend positions great opportunities especially in the baby food, skin care and apparel segments of this industry. There is a big potential market in urban India for organic baby apparels, footwear which aids proper foot development and organic baby food.

Other opportunity areas are penetration of baby care products in rural India, introduction of premium products and introduction of convenience products.

Growth of this industry has opened the doors to many foreign baby care product companies to market their brands in India. If these companies want to really penetrate deeper [including rural India], then they must bring down their prices. For this they need to establish manufacturing units in India and this itself opens up possible entrepreneurial opportunities. This also throws up a chance to innovate baby care products which might be perfected [in some case] for Indian needs.